BAC HOME LOANS SERVICING, LP, f/k/a COUNTRYWIDE HOME LOANS SERVICING, LP, Appellee, v. KIM E. MITCHELL, Appellant.
116311
Supreme Court of Illinois
March 20, 2014
2014 IL 116311
Supreme Court
BAC Home Loans Servicing, LP v. Mitchell, 2014 IL 116311
Caption in Supreme Court: BAC Home Loans Servicing, LP, f/k/a COUNTRYWIDE HOME LOANS SERVICING, LP, Appellee, v. KIM E. MITCHELL, Appellant.
Docket No. 116311
Filed March 20, 2014
Held (Note: This syllabus constitutes no part of the opinion of the court but has been prepared by the Reporter of Decisions for the convenience of the reader.) Where a debtor‘s first appearance in a defaulted mortgage proceeding was posttrial, with a motion to vacate based on defects in the substituted service which had been attempted, the debtor had made a waiver, but it was prospective only and did not retroactively validate earlier orders entered without personal jurisdiction, which should be vacated.
Decision Under Review Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Laura Cha-Yu Liu, Judge, presiding.
Judgment Reversed and remanded.
Counsel on Appeal Daniel J. Voelker and Tricia L. Putzy, of Voelker Litigation Group, of Chicago, for appellant. Steven F. Smith, Ashley H. Nall and Amy E. Breihan, of Bryan Cave LLP, of Chicago for appellee.
Justices JUSTICE KILBRIDE delivered the judgment of the court, with opinion. Chief Justice Garman and Justices Freeman, Thomas, Karmeier, Burke, and Theis concurred in the judgment and opinion.
¶ 1 In this case, we consider whether a party‘s waiver of objections to the circuit court‘s personal jurisdiction applies retroactively to validate orders entered prior to the party‘s submission to the court‘s jurisdiction. The appellate court held that the waiver applied both prospectively and retroactively. For the following reasons, we hold that a party‘s waiver of personal jurisdiction is prospective only and does not serve to validate retroactively orders entered by the circuit court without personal jurisdiction. Accordingly, we reverse the appellate court‘s judgment and remand to the circuit court for further proceedings.
I. BACKGROUND
¶ 2 Defendant, Kim E. Mitchell, executed a promissory note with Countrywide Home Loans, Incorporated, in the amount of $75,400. The note was secured by a mortgage on defendant‘s home in Chicago. Approximately four years later, plaintiff BAC Home Loans Servicing, LP, formerly known as Countrywide Home Loans Servicing, LP, filed a complaint to foreclose the mortgage.
¶ 3 The special process server‘s affidavit states defendant was served with summons and complaint by substituted service on November 14, 2009. According to the affidavit, a copy of the process was left at defendant‘s residence with her daughter, Michelle Foreman, who also lived at the residence.
¶ 4 Defendant did not answer the complaint. Plaintiff mailed defendant a notice stating it intended to move for entry of a judgment of foreclosure and sale on June 9, 2010. On June 3, 2010, plaintiff filed a motion for order of default, a motion for judgment of foreclosure and sale, and a motion to appoint a selling officer. On June 9, 2010, the circuit court of Cook County granted plaintiff‘s motions, entering an order of default, an order appointing a selling officer, and a judgment for foreclosure and sale.
¶ 5 A notice of sale was mailed to defendant‘s address and a judicial sale was held on September 13, 2010. On August 2, 2011, plaintiff filed a motion for an order confirming the report of sale and distribution and for possession. Notice of the motion was mailed to defendant. The circuit court entered an order confirming the sale on September 14, 2011.
¶ 6 On October 12, 2011, defendant filed an appearance and a motion to vacate the circuit court‘s September 14, 2011, order confirming the report of sale and distribution and for possession. Defendant asserted “to the best of her knowledge” she was never served with summons, she did not receive notice of the motion for default judgment, she was informed by plaintiff that a loan modification had been approved, and she did not receive notice of the September 14, 2011, order. Defendant asked the court to vacate the order “in the interest of justice.”
¶ 8 In its response to the motion, plaintiff asserted defendant was served by substituted service on November 14, 2009. Plaintiff attached a copy of the affidavit of service. The affidavit stated substituted service was made by:
“leaving a copy of this process at [defendant‘s] usual place of abode with: Michelle Foreman (Relationship) Daughter, a person residing therein who is of the age of 13 years or upwards and informed that person of the contents thereof and that further mailed a copy of this process in a sealed envelope with postage paid addressed to the defendant at his/her usual place of abode on 11-17-09.”
¶ 9 Defendant filed a reply, asserting the substituted service was defective because she does not have a daughter. Defendant asserted her only child is a son named William Mitchell and she does not know anyone named Michelle Foreman. Defendant attached an affidavit stating those facts.
¶ 10 The circuit court denied defendant‘s motion to quash the order confirming the sale. Defendant‘s alternative
¶ 11 On appeal, defendant contended that the substituted service of process was defective and the circuit court, therefore, lacked personal jurisdiction to enter the default judgment, the judgment of foreclosure, the order of sale, and the order of possession. Plaintiff acknowledged the substituted service was improper because it was not in compliance with
¶ 12 The appellate court observed that challenges to personal jurisdiction are governed by
¶ 13 The appellate court noted that failure to comply with the statutory requirements for challenging the court‘s personal jurisdiction results in waiver of “all objections to the court‘s jurisdiction over the party‘s person.” (Internal quotation marks omitted.) 2013 IL App (1st) 121713-U, ¶ 41. Based on that statutory language, the appellate court held defendant‘s waiver “worked prospectively and retroactively.” 2013 IL App (1st) 121713-U, ¶ 41. Accordingly, defendant waived any jurisdictional challenge to the circuit court‘s orders entered prior to her initial postjudgment motion in this case. The trial court‘s judgment was, therefore, affirmed. 2013 IL App (1st) 121713-U.
II. ANALYSIS
¶ 15 To enter a valid judgment, a court must have both jurisdiction over the subject matter and jurisdiction over the parties. In re Marriage of Verdung, 126 Ill. 2d 542, 547 (1989). A judgment entered by a court without jurisdiction over the parties is void and may be challenged at any time, either directly or collaterally. Verdung, 126 Ill. 2d at 547. We review de novo whether the circuit court obtained personal jurisdiction. In re Detention of Hardin, 238 Ill. 2d 33, 39 (2010).
¶ 16 Personal jurisdiction may be established either by service of process in accordance with statutory requirements or by a party‘s voluntary submission to the court‘s jurisdiction. Verdung, 126 Ill. 2d at 547. As in the appellate court, plaintiff concedes that the substituted service of process in this case was defective and did not confer personal jurisdiction.
¶ 17 The appellate court determined, however, that defendant voluntarily submitted to the circuit court‘s jurisdiction by filing her initial postjudgment motion to vacate the order confirming the sale on October 12, 2011. Defendant did not challenge that determination in her petition for leave to appeal, her opening brief, or her reply brief. Rather, defendant‘s only argument on appeal to this court has been that by filing her October 12, 2011, motion, she submitted to the court‘s jurisdiction prospectively only. Defendant “emphasize[d] the need for this court‘s guidance and clarification” on whether waiver of objections to personal jurisdiction under
¶ 18 At oral argument, counsel for defendant argued for the first time in this court that defendant did not submit to the circuit court‘s jurisdiction by filing her October 12, 2011, motion. Counsel contended that defendant‘s motion was in compliance with
¶ 19 Plaintiff‘s counsel responded that this issue was not raised in defendant‘s petition for leave to appeal or her briefs on appeal to this court. Plaintiff‘s counsel, therefore, argued that the issue was not properly before this court.
¶ 20 We agree with plaintiff that defendant forfeited this argument by failing to raise it in her petition for leave to appeal, her opening brief, or her reply brief.
¶ 22 Accordingly, the sole issue properly before this court is whether by filing her initial postjudgment motion, defendant waived objections to the circuit court‘s personal jurisdiction both prospectively and retroactively. Defendant contends her postjudgment motion resulted in waiver of objections to the court‘s personal jurisdiction prospectively only. She maintains that her waiver of objections cannot serve to validate retroactively previous orders entered by the circuit court without personal jurisdiction.
¶ 23 Plaintiff responds that under
¶ 24 In Verdung, this court considered whether a party‘s general appearance in a case conferred personal jurisdiction on the circuit court retroactively. This court held there was no doubt that the circuit court had personal jurisdiction over the party as of the date of her general appearance. This court held, however, that “a party who submits to the court‘s jurisdiction does so only prospectively and the appearance does not retroactively validate orders entered prior to that date.” Verdung, 126 Ill. 2d at 547.
¶ 25 To support its holding, this court relied upon the appellate court‘s decisions in J.C. Penney Co. v. West, 114 Ill. App. 3d 644 (1983), and Sullivan v. Bach, 100 Ill. App. 3d 1135 (1981). In J.C. Penney, the appellate court held that a defendant‘s voluntary submission to the circuit court‘s jurisdiction was prospective only. By filing a petition to vacate a default judgment, the defendant did not submit to the circuit court‘s jurisdiction retroactively to validate previous orders entered without personal jurisdiction. J.C. Penney Co., 114 Ill. App. 3d at 647. Rather, “where a judgment is void when entered, it remains void” despite subsequent submission by a party to the circuit court‘s jurisdiction. J.C. Penney Co., 114 Ill. App. 3d at 646. The appellate court reasoned:
“Where the defendant is found to have voluntarily submitted himself to the court‘s jurisdiction prior to judgment, the court has personal jurisdiction at the time it enters the judgment order, but the same logic serves only to submit a defendant to the court‘s jurisdiction as of the date he appeared, not retroactively as of the date of the ex parte judgment, where his appearance comes after judgment is entered. [Citation.] A defendant‘s attempts to set aside a void judgment subsequent to the entry of that judgment are not to be considered as giving the court original jurisdiction to enter the judgment; doing so deprives the defendant of his day in court. [Citations.]” (Emphasis added.) J.C. Penney Co., 114 Ill. App. 3d at 647 (quoting Sullivan, 100 Ill. App. 3d at 1142).
¶ 27 Plaintiff contends, however, that the rule in Verdung is no longer valid because it was established prior to the amendment of
¶ 28 Before the amendment in 2000,
“(a) Prior to filing any other pleading or motion, a special appearance may be made either in person or by attorney for the purpose of objecting to the jurisdiction of the court over the person of the defendant. A special appearance may be made as to an entire proceeding or as to any cause of action involved therein. Every appearance, prior to judgment, not in compliance with the foregoing is a general appearance.”
735 ILCS 5/2-301(a) (West 1998) .
¶ 29 Following the amendment in 2000,
“(a) Prior to the filing of any other pleading or motion other than a motion for an extension of time to answer or otherwise appear, a party may object to the court‘s jurisdiction over the party‘s person, either on the ground that the party is not amenable to process of a court of this State or on the ground of insufficiency of process or insufficiency of service of process, by filing a motion to dismiss the entire proceeding or any cause of action involved in the proceeding or by filing a motion to quash service of process. Such a motion may be made singly or included with others in a combined motion, but the parts of a combined motion must be identified in the manner described in Section 2-619.1. Unless the facts that constitute the basis for the objection are apparent from papers already on file in the case, the motion must be supported by an affidavit setting forth those facts.
(a-5) If the objecting party files a responsive pleading or a motion (other than a motion for an extension of time to answer or otherwise appear) prior to the filing of a motion in compliance with subsection (a), that party waives all objections to the court‘s jurisdiction over the party‘s person.”
735 ILCS 5/2-301(a), (a-5) (West 2010) .
¶ 30 A conflict has arisen in our appellate court on the impact of the 2000 amendment to
¶ 31 When construing a statute, our primary objective is to ascertain and give effect to the intent of the legislature. People v. Elliott, 2014 IL 115308, ¶ 11. The most reliable indicator of legislative intent is the statutory language, given its plain and ordinary meaning. Elliott, 2014 IL 115308, ¶ 11. In determining the statute‘s plain meaning, we consider the subject it addresses and the legislature‘s purpose in enacting it. Elliott, 2014 IL 115308, ¶ 11.
¶ 32 Plaintiff emphasizes that under the amended statute, a party “waives all objections to the court‘s jurisdiction over the party‘s person” by initially filing a responsive pleading or motion.
¶ 33 The critical issue here, though, is whether the waiver of all objections applies retroactively to validate an order or judgment entered without personal jurisdiction. Personal jurisdiction is established either by effective service of process or by a party‘s voluntary submission to the court‘s jurisdiction. Verdung, 126 Ill. 2d at 547. The amended statute does not specifically state the effect a party‘s waiver of objections has on orders or judgments entered by the court without personal jurisdiction. The statute does not state that the waiver is intended to validate orders entered prior to service of process or the party‘s voluntary submission to the court‘s jurisdiction.
¶ 34 Further, it is not apparent from the statutory language that the legislature intended to abrogate this court‘s established case law providing that “a party who submits to the court‘s jurisdiction does so only prospectively and the appearance does not retroactively validate orders entered prior to that date.” Verdung, 126 Ill. 2d at 547. The settled law prior to the amendment to
¶ 35 In one recent case, the appellate court read
¶ 37 In explaining the amendment to
“This bill amends the Code of Civil Procedure dealing with special appearances. It is not an initiative of the Illinois State Bar Association but it was suggested by the Bar Association. It‘s a cleanup. It is designed to prevent an unknowing waiver. When you file a motion in court, before you file your special appearance, it allows you to file your special appearance and other motions at the same time.” (Emphasis added.) 91st Ill. Gen. Assem., Senate Proceedings, Mar. 11, 1999, at 42-43 (statements of Senator Hawkinson).
¶ 38 The remarks by Senator Hawkinson support a conclusion that the amendment was intended to “prevent an unknowing waiver” of a party‘s objections to personal jurisdiction. Prior to the amendment,
¶ 39 Although the legislative history shows the amendment was intended to clarify the law to prevent inadvertent waivers of objections to the court‘s personal jurisdiction, it is not entirely clear that the amendment accomplished its objective. In this case, defendant‘s initial postjudgment motion to vacate the order confirming the sale was filed by her attorney and it alleged defective service of process. The appellate court, nevertheless, held the motion was insufficient to preserve defendant‘s objections to the court‘s personal jurisdiction under
¶ 40 In any case, there is no indication from the legislative history that the amendment was intended to alter the existing law on the effect of waiver of objections to personal jurisdiction. The amendment to
¶ 41 Based on the statutory language and legislative history, we do not believe the legislature intended to adopt a rule allowing a defendant‘s waiver to validate retroactively orders entered without personal jurisdiction. Plaintiff‘s proposed construction of the statute is at odds with the fundamental rationale of our rule providing for prospective-only submission to the court‘s
¶ 42 Here, defendant voluntarily submitted to the circuit court‘s personal jurisdiction by filing her initial postjudgment motion to vacate the order confirming the sale on October 12, 2011. By filing her motion, defendant waived objections to the circuit court‘s personal jurisdiction prospectively only, however. The waiver did not serve to validate retroactively the void orders entered prior to defendant‘s submission to the court‘s jurisdiction.
¶ 43 A judgment entered by a court without personal jurisdiction is void and may be challenged at any time, either directly or collaterally. Verdung, 126 Ill. 2d at 547. The orders entered by the circuit court without personal jurisdiction prior to defendant‘s October 12, 2011, postjudgment motion must be vacated. We, therefore, reverse the judgments of the appellate and circuit courts, and remand to the circuit court for further proceedings.
III. CONCLUSION
¶ 44 For the foregoing reasons, the judgments of the circuit court and the appellate court are reversed. The cause is remanded to the circuit court for further proceedings.
¶ 45 Reversed and remanded.